Dream out of reach? Is Key West too expensive?
There have been several articles recently about the high cost of living in Key West as well as the low wages. This seems to be the trend everywhere. As part of the journey, housing is the first thing we need to secure in our move to Key West. Do you rent or do you own? I think I would prefer to own… it appears to be much cheaper than rent.
Looking at rent in Key West, it is very expensive. Here is an article on Moving to Key West and the costs. It appears to be just simply a case of supply and demand. Few housing options and high demand. We see this a lot when we travel to other vacation destinations. Those who live and work in the resort town, usually cannot afford to live there. Key West is in a unique position since it is an island. There really is not a lot of options, other than going farther up the Keys – but then you are forced into a longer than needed, wanted commute; which just adds more expenses to someone’s budget.
Let’s examine how much housing costs versus how much it should cost. A small, tiny place in Key West starts around $1,600 a month. This is most likely a studio or very small bedroom apartment. Reminiscent of the high cost of housing in Manhattan. Since Key West has such a strong tourist draw, the majority of employers are in the hospitality trade. I have a kid who has a culinary degree, so I truly understand how underpaid most of these employees are. So, let’s assume you can find a job paying $10 an hour and let’s further assume you are able to work full time (keep in mind most hospitality jobs are part-time), then your monthly gross wages are $1,600 a month. Well…. without a roommate (or several) a one bedroom apartment is totally out of reach. So, to back into the amount of money you need to make, assume no more than 25% of your take-home pay should go to housing, then your monthly net income should be $6,500. Wow, how many servers, bartenders, front desk clerks make that much? Looks like everyone needs at least two jobs.
That’s why we are looking at owning. Keep in mind, it usually is always cheaper to own than rent. Looking at a small two bedroom condo, including your condo fees, our house payment is in the $1,200 range. This gives us a bigger place with a lower monthly payment. This amount, keeps us somewhat in line with our current mortgage, but obviously a house half the size. But, after all there are sacrifices to make when living in Paradise.
Exploring all of the housing options in Key West, got me thinking about the high cost of housing, not just in Key West, but everywhere. Even in small to mid-size towns across America, unaffordable housing is an issue. Going back to my example of $10 an hour, then you gross $1,600 month which makes your take home around $1,360 after taxes. Let’s then walk through a typical budget. If an apartment costs $600 (about average in most areas – this is a per bedroom cost), and if you have a car payment and car insurance of $400, then there is only $360 dollars left in the budget … and you haven’t eaten yet. Or paid your student loan payments, or put gas in your car, or bought well, anything! So, I guess, part of the issue is minimum wage isn’t enough to live on… yet, we pay most of hospitality workers minimum wage. We, by default, have created a system where these folks can never afford to live a decent life or even get ahead. Not the American dream we are promised is it.
I know, I know, the answer is education. Go to school, get good grades and then get a good job. Well, I have another kid, graduated with a Petroleum Technology degree – cannot find a job. Upon graduation, the oil and gas market dropped, yeah!! no one is hiring. So, to pay for his student loans and other expenses, he is now a long distance truck driver. He has a job, but not in his field, but better pay than being a waiter.
I don’t know what the answer is, but I am fully aware there is a problem. How can we fix it? I don’t know, but am welcome to hearing ideas. I try to tip those in hospitality well, especially if they provide great service. I think that is a start. Learning a new trade, skill or vocation, yep, there’s another idea. How about owning your own business, taking your financial future firmly into your own hands; another idea.
For now, we are are looking at our options on buying a slice of Paradise. It will be small, but it will be in Key West. But, we are certainly embarking on this adventure with our eyes wide open.